Although the quarterly non-current rate of residential loans serviced by banks worsened, foreclosures started and completed fell as did the foreclosure rate.
Loans that were at least 30 days past due or in the foreclosure process represented 5.3 percent of all loans serviced by the banks as of the fourth-quarter 2016.
The non-current mortgage rate deteriorated from 5.2 percent compared to three months earlier. But the rate improved versus 5.9 percent a year earlier.
The Office of the Comptroller of the Currency presented the statistics in its OCC Mortgage Metrics Report Fourth Quarter 2016.
Included in the non-current rate was an 0.7 percent foreclosures-in-process rate, down from 0.8 percent at the end of the third quarter and 1.1 percent at the end of 2015.
The banks initiated 45,500 foreclosures during the fourth-quarter 2016. The total was reduced from 48,000 in the third quarter and 63,400 in the final quarter of 2015. For all of 2016, there were 201,100 foreclosures initiated.
Foreclosures completed during the most-recent three-month period numbered 20,100, declining from 25,100 in the previous quarter and 29,300 a year previous. Full-year 2016 repossessions amounted to 100,700.
The OCC’s report reflects 19.838 million first-lien residential loans and closed-end home-equity loans
with an aggregate unpaid principal balance of $3.453 trillion that were serviced by Bank of America, Citibank, HSBC, JPMorgan Chase, PNC, U.S. Bank and Wells Fargo as of Dec. 31, 2016. The loans reportedly represent 35 percent of all U.S. outstanding residential debt.
The collective servicing portfolios at the seven financial institutions
has fallen from 20.392 million loans serviced for $3.495 trillion as of Sept. 30, 2016, and 21.473 million loans for $3.678 trillion at the end of 2015.
Aggregate servicing at the banks has retreated each quarter since at least the fourth-quarter 2014, when the total was 23.122 million mortgages for $3.906 trillion.
Loans
underwritten for conforming or jumbo programs, which are classified as prime mortgages, accounted for 90 percent of loans serviced as of year-end 2016. Alt-A loans to borrowers with prime credit who don’t qualify for conforming or jumbo programs made up 2 percent; while subprime loans to borrowers with prior delinquencies, judgments, bankruptcies or foreclosures on their credit report at the time of underwriting accounted for 3 percent. The remaining 5 percent were classified as “other” because a risk category was not identified for the loans.
